Written for and published by Pender & Howe.
The importance of economic stability is at an all-time high considering the turbulent times we have experienced over the last few years. Dealing with so many unforeseen circumstances has led to budget cuts, lean teams, remote work, and more.
When looking for ways to manage costs, managers and executives are often trained to ignore money already spent, instead focusing on future spending. When it comes to tracking the cost and value of meetings, for example, managers commonly dismiss the cost of people’s time as a “sunk cost” because they’ve already committed to paying salaries.
Companies spend an enormous amount of money paying people to sit in meetings, but they fail to consider how efficient or effective those meetings really are. Furthermore, most people are not trained to participate in, or run, effective meetings.
A staggering 70% of employees report they don’t have mastery of the skills needed to do their jobs. (Harvard Business Review)
Also frequently overlooked, the cost of lost productivity is a key culprit of financial drain for leaders, managers, and their company. Leaders now, more than ever, need to be equipped with data and insights about their people to succeed in this climate of uncertainty. Being aware of strengths, weaknesses, gaps, and leader/team effectiveness allows you to focus on areas for improvement.
For example, imagine an employee who loses 5 hours of productivity a day. If that employee is paid $50,000 a year, their lost productivity would cost the company approximately $32,370 annually.
Does 5 hours sound high? Lost productivity time can add up quickly:
If proper structures and communication norms were improved on this employee’s team, the cost of lost productivity will be reduced. If reduced by 50%, that’s $16,185 in savings.
Now imagine that team has five other members who are also more efficient and productive as a result of training in structures and communication (5 x $16,185).
You just saved $80,925 in lost productivity costs.
Your company’s cost of lost productivity, as it relates to training and development, is a simple yet effective way to increase productivity and efficiency—ultimately leading to a positive impact on your bottom line.
At Vivo Team we have identified six key indicators that lead to high-performing leaders and teams:
Communication – Clear and open communication reduces misunderstanding and costly errors, minimizes work delays, and enhances overall productivity.
Structures – Unifying and streamlining work processes and related behavioral norms builds the foundation for efficient and successful teams.
Interactive Feedback – A feedback culture provides essential information for decision making and performance improvement by reflecting on the past and anticipating future results.
Emotional Intelligence – Awareness and management of one’s emotions while navigating the emotions of others reduces assumptions and increases psychological safety and connection.
Accountability – Holding one another accountable drives innovation, trust, and productivity.
Cohesion – Team cohesion positively impacts project outcomes, client satisfaction, team engagement, and collaboration resulting in increased success and productivity.
By using behavioral analytics to evaluate your team’s effectiveness in these areas, leaders can uncover insights into where improvements need to be made to recoup losses. Team effectiveness and lost productivity costs are interdependent. Thus, by increasing your team’s effectiveness you will decrease your company’s lost productivity costs.
Don’t just sit on this newfound knowledge–be a proactive leader—move the needle forward. To successfully lead through change, leaders must critically assess where and how they can reduce unnecessary lost costs.